3 Short Plays If NAFTA Crumbles

President Donald Trump has renewed his threat to kill NAFTA after criticizing Canadian and Mexican positions in ongoing negotiations. Many Wall Street analysts believe that the United States has more to lose than its northern or southern neighbors if the president follows through, as ending the trade agreement could trigger steep declines in a broad swath of publicly traded issues that depend on north-south trade for their quarterly and annual revenues.

Three potential short sale plays stand out if NAFTA collapses, but given mixed messages from the White House, no one knows when sell signals will go off. Even so, now is the right time to identify profitable strategies – not after a Tweet or executive order sends shockwaves through the U.S. financial markets. Railroads, auto manufacturers and truckers look like the biggest losers should NAFTA collapse, in turn shining a bearish light on the broader transportation sector. (See also: Tips for Trading the Dow Jones Transportation Average.)

These stocks could sell off if President Trump follows through on his threat to terminate the trade agreement. …read more